Per- and polyfluoroalkyl substances, or PFAS, are a significant insurance risk. While steps are being taken to phase out these “forever chemicals,” their impact on both people and the environment, and the resulting litigation, is expected to roll on for decades.
Also known as legacy chemicals, PFAS have been around since the 1930s, with Teflon being one of the first instances of them being used commercially to make products resistant to substances. Since then, their use has expanded considerably, and they are now found in everything from clothing and cosmetics to carpets and firefighting foam.
PFAS were originally described as chemically inert but are now known to have a long half-life (in some cases up to five years) and are linked to a wide range of issues, from environmental pollution to serious health problems. They are absorbed into the human body not only by consumption, but by other means, such as applying to the skin, and have been linked to issues such as cancers, decreased immunity, fertility issues, liver issues and thyroid disease.
The full impact of PFAS has yet to be established but it is likely to affect a broad cross-section of society. Understandably, people are seeking justice. In the US there are currently thousands of lawsuits pending, and while litigation is still in the early stages, settlements are running to billions, with environmental liabilities forecast to be in the hundreds of billions.
The possibility that PFAS could be the ‘next asbestos’ from a litigation point of view has been mooted. Whether or not this proves to be the case, forever chemicals have been highlighted as a significant potential issue for the insurance industry.
From an insurance perspective, the scope of coverage impacts is extensive. PFAS risks span commercial general liability, employer’s liability, directors & officers, pollution, and professional liability policies, with potential claims including bodily injury, property damage, impact to natural resources, and associated remediation or clean-up costs.
While understanding the scope of this issue is still in its early stages, PFAS have been found at several sites across the developed world, and Crawford Environmental is already advising clients on meeting the growing challenges at multiple touch points.
This includes working with corporates who have acquired old brownfield sites or operational assets and need to consider management, mitigation and disposal of PFAS.
We can help by reviewing existing environmental studies and investigation reports to identify gaps that mean PFAS have not been addressed which is an activity that can significantly impact deal valuations in property transactions.
We also carry our thorough surveys and PFAS assessments – for example, on land with known historical industrial use and potential for PFAS, enabling clients to offset exposure through insurance policies.
Crawford Environmental also assesses and reviews the impact and costs of third-party PFAS remediation following catastrophic events, which present unique and complex risk exposures for corporates, insurers, and brokers.
This is a complex and still-evolving landscape for both insurers and regulators with little, if any, historical claims data. There is also the question of different laws as well as varying policy cover across different geographies; there may be more than a few instances of uninsured losses.
To give an example of the current geographical differences. The U.S. Environmental Protection Agency (EPA) has taken significant steps to regulate PFAS, particularly in drinking water, while numerous states have introduced their own related regulations. In August, the European Chemicals Agency published an updated restriction proposal for PFAS to tackle the associated risks. Japan banned 138 PFAS substances effective from January 2025, and Canada is currently enacting a phased ban on PFAS across industrial and consumer sectors.
Amid this rapidly shifting landscape, Crawford Environmental can help with addressing the issues and provide clear and comprehensive guidance for a pragmatic, risk-based approach, developing integrated solutions to support the identification, management, mitigation, and transfer of PFAS-related risks across the full asset and operational lifecycles. To find out more, contact Robert Latimer or take a look at our brochure.
